Since the introduction of the shared economy, the financial freedom of employees has shifted in the ability for or against it in the United States. The formal work setting of going to an office for a 9 to 5 job is increasingly being accompanied by the gig economy, which although provides the freedom of shaping one’s own schedule, lacks the stability of a full time formal employment.
Drivers, renters, freelances and others, who work within the frame of the share economy, are generating income through new forms that could be hardly might in the past several decades. But at the same time, they also have their own advantages and disadvantages characteristic for each of them.
Opportunities presented by the shared economy
However, an advantage of the shared economy is flexibility that is associated with shared products and services. People can decide their working schedules, which is flexibility notable when it comes to carrying out other responsibilities. Thus, flexibility is highly appreciated by students, pensioners, and parents.
However, the entry barriers are not very high as has been explained above concerning the strategic market position of the industries. Generally, it requires only a smartphone and a means of transport to get started for employment opportunities. This accessibility makes it possible for people of different background to participate thus promoting economic diversity.
Income diversification
In the share economy the workers are provided the flexibility to have multiple sources of income. While with traditional employment, a person can only have one business to attend, with gig economy people can perform multiple roles. This can be of great advantage especially during lean years when normal employment opportunities may not be available.
Thus, diversification in income sources can help as a fallback strategy. The dream is created in a way that if one source of income is no longer fruitful, there might be other source that will be still productive, thus, minimizing the total risk. This strategy puts the organization in a better position to deal with times of economic uncertainty, hence it fits the modern concept of economic adaptability.
Skill development and networking
It also gives a chance for development of certain skills and ability to build a net work of contacts. It stated that, going to different types of work will help people to gain a variety of experiences that will in turn give their resume a boost. This is especially helpful to young entrepreneurs and employees aspiring to get a job in some of the most competitive industries.
Another important benefit is the actual building of the network. The employees make working contacts with thousands of individuals from different origins, thus, yielding working interactions and exchange of information. Such relationships can result in an opportunity for a permanent job offer, partnership, or other opportunities of career ladder.
Challenges in the shared economy
At the same time, you will find that the shared economy has some drawbacks. Job insecurity is the most serious problem that has been observed in the existing schemes of employment relations. Gig employees often have no access to the compensations like health insurance policy, pension, and paid vacation.
Another problem is related with income fluctuations. Hence, while in the other conventional jobs, the earnings are more or less fixed depending on the agreed upon wages per month, in the shared economy, this may not always be the case. This element of unpredictability makes planning for the future in terms of personal finance a stressful prospect, which in turn can take a toll on a worker.
Regulatory hurdles
Still, it is possible to talk about the emergence of specific regulation of the shared economy. Several governments are struggling to determine the status of the gig workers so that they can be placed under the right category for regulation. Such disparities are problematic as it complicates comprehension of rights and responsibilities of workers.
Certain states and cities have come up with legislation aimed at affording workers classified as gig workers certain levels of legal protections. For instance, Assembly Bill 5 in California seeks to revise many gig workers’ status in an employee category. However, existing laws in this regard may be met by stiff resistance from companies and this leads to legal confrontations.
Economic disparities
The phenomenon of sharing economy can actually increase the gap within this regard. Having a proper exercise of social responsibilities, the goal setting criteria must harmonize with the types of workers and their motivation; some workers might become rich and receive high wages, whereas others may barely make their living.
Also, work in gig economy is characterized by the fact that there is little to no career advancement. The majority of the gigs’ employment does not have a prospect of learning and career mobility that allows the worker to advance financially in his or her career.
